Regulation and innovation are often presented as opposing forces. In reality, sustainable growth in financial services depends on both: firms need room to develop, while customers and markets need appropriate protection.

The FCA's expanding support for innovative and fast-growing firms suggests a welcome recognition that effective regulation requires dialogue. Regulators need to understand how firms operate in practice, particularly when business models, technology and customer expectations are changing quickly.

Support throughout the growth journey

The FCA's Scale-up Unit offers eligible growing firms a dedicated point of contact and practical support with regulatory processes, product innovation and the effect of policy developments. Its first pilot cohort involved six dual-regulated banks and building societies, followed by an application window for solo-regulated firms earlier in 2026.

Importantly, the FCA has said that insights from participating firms will help inform wider policy and process improvements. This creates the prospect of a useful two-way exchange: firms receive greater regulatory clarity, while the regulator develops a better understanding of the practical challenges businesses face as they grow. Read the FCA announcement.

The Scale-up Unit sits alongside existing FCA services, including Innovation Pathways, the Pre-Application Support Service and Early and High Growth Oversight. Together, these initiatives are intended to create a clearer pathway from start-up to scale-up.

This does not mean lower standards or guaranteed regulatory decisions. The FCA is explicit that the Scale-up Unit complements existing supervision and that participation does not amount to endorsement. Its purpose is to make regulatory engagement more effective, not less rigorous. See the FCA's Scale-up Unit guidance.

Our experience of Early and High Growth Oversight

Authorised Compliance was selected for the FCA's Early and High Growth Oversight function, or EHGO. This is separate from the Scale-up Unit but reflects the same broader direction: closer engagement with firms during important stages of their development.

Our interactions with the regulator have clearly demonstrated the value of that approach. Through EHGO, we have received additional guidance and support, giving us further opportunities to discuss regulatory expectations and consider how they apply to the way our business operates.

The experience has been positive. Direct engagement can help firms identify questions earlier, understand the regulator's perspective and ensure that governance and controls develop alongside the business.

That is not a substitute for a firm taking responsibility for compliance. Nor does closer support remove the need for sound judgement, effective systems or evidence of good customer outcomes. What it can provide is a more productive environment in which firms understand what is expected and regulators better understand the businesses they supervise.

The FCA describes EHGO as enhanced supervision designed to help newly authorised and scaling firms understand their obligations, raise standards and anticipate risks. It also gives the regulator an opportunity to identify potential harm earlier. Read more about EHGO.

Regulation informed by how firms actually operate

Regulatory requirements inevitably look different when applied across firms with different products, technologies, distribution models and growth plans. Published guidance remains essential, but it cannot anticipate every operational question faced by an innovative or rapidly developing business.

Constructive engagement helps close that gap.

When regulators listen to firms, they gain a clearer view of how rules work in practice, where unnecessary friction may arise and where emerging risks require attention. Firms, in turn, gain a better understanding of the outcomes the regulator expects and can build those expectations into their operations earlier.

The Bank of England has similarly described the joint Scale-up Unit as a way to provide tailored support while helping regulators understand scaling firms' experience and improve regulatory processes for the wider sector. Read the joint regulators' cohort announcement.

That is positive for the industry. Better-informed regulation should support firms that want to grow responsibly while allowing regulatory resources to remain focused on genuine risks to consumers and markets.

A welcome change in regulatory culture

The significance of initiatives such as the Scale-up Unit and EHGO is not simply the additional guidance available to participating firms. It is the broader signal they send about the relationship between regulators and the businesses they oversee.

Growth and consumer protection should not be treated as competing objectives. When firms and regulators engage openly, practical experience can inform supervision and policymaking without weakening standards.

Our experience through EHGO gives us reason to welcome this direction. A regulator that is prepared to understand how firms operate, provide appropriate guidance and learn from industry experience is better placed to support responsible innovation.

For growing firms, the message remains straightforward: regulatory engagement works best when it is early, open and supported by strong evidence. Firms must still own their obligations, but a more accessible and informed regulator can help them meet those obligations with greater clarity and confidence.